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This paper studies how communication allows for the specialized acquisition of knowledge. It shows that a knowledge-based hierarchy is a natural way to organize the acquisition of knowledge when matching problems with those who know how to solve them is costly. In such an organization, production workers acquire knowledge about the most common or easiest(More)
Large economies export more in absolute terms than do small economies. We use data on shipments by 126 exporting countries to 59 importing countries in 5,000 product categories to answer the question: how? Do big economies export larger quantities of each good (the intensive margin), a wider set of goods (the extensive margin), or higher quality goods? We(More)
In this paper we examine the importance of local spillovers such as network externalities  and learning from others in the diffusion of home computers. We use data on 110,000 U.S.  households in 1997. Controlling for many individual characteristics, we find that people are more likely to buy their first home computer in areas where a high fraction of(More)
This paper presents evidence that the spread between the marginal product of capital and the return on nancial assets is much higher in poor than in rich countries. A model with costly intermediation is developed. In this economy, individuals choose at each instant whether to work or to operate a technology. Entrepreneurs nance their business with their own(More)
Why do growth and net exit rates of establishments decline with size? What determines the size distribution of establishments? This paper presents a theory of establishment dynamics that simultaneously rationalizes the basic facts on economy-wide establishment growth, net exit, and size distributions. The theory emphasizes the accumulation of(More)
Contingent valuation is used to value tropical forest resources for a rural population in Africa. Welfare losses from land-use restrictions associated with a newly established national park in Madagascar are estimated with a willingness-to-accept format. Because of a limited local cash economy, the contingent valuation question is denominated in baskets of(More)
This paper proposes a new, more robust, experiment to test for the presence of hyperbolic discounting. Recently, a growing literature has studied intertemporal choice when individuals discount the future hyperbolically. These preferences generate dynamically inconsistent choices, in contrast with the usual assumption of exponential discounting, where this(More)
This paper investigates the sequential college attendance decisions of young women and quantifies the impact of marriage expectations on their college decisions. A dynamic choice model of college attendance, labor supply, and marriage is formulated and structurally estimated using panel data from the National Longitudinal Survey of Youth 1979 (NLSY79). The(More)
Federal and state governments spend well over a billion dollars a year on programs that encourage employment development in disadvantaged labor markets through the use of subsidies and tax credits. In this paper we use an estimation approach that is valid under relatively weak assumptions to measure the impact of State Enterprise Zones (ENTZs), Federal(More)